Five years ago I was just starting at RCR as managing editor and the C-block auction was just about to get started, too.
Everything was in place. The rules were set. And then along came a little Supreme Court decision called Adarand, which challenged programs that steered contracts toward minority-owned businesses. The decision would call into question, and in fact overturn, many federal affirmative-action programs.
The decision hit the streets just before the C-block auction was about to start. The rules and the expectations for the auction were turned upside down and the start date was even delayed.
Once the auction began, the top competitors were anything but small. Prices climbed to astronomical amounts and bidders took every possible tactic-including some questionable ones-to secure the top markets. Companies positioned themselves through alliances and financing and speculation of public offerings so that the world-and the federal government-would find their bids feasible and buy into their business plans.
NextWave Telecom Inc. burst on the scene and became the top bidder, winning $4.7 billion in licenses and setting up an impressive footprint for wireless service. Smoke and mirrors. It was not to be. When it came time to pay the piper for the licenses, NextWave and several other overinflated bidders chose bankruptcy instead.
Several years, countless proposals and many courtrooms later, the FCC this week said no more. NextWave’s licenses have been yanked for nonpayment.
The licenses are scheduled to be reauctioned this summer. I have a feeling there might be a few more years and a few more courtrooms before the saga of the C-block comes to a close.
Ironically, Adarand also made the news this week. After the first victory, the Colorado construction firm filed a second lawsuit, challenging state affirmative-action rules. After flip-flopping in the courts for a while, the U.S. Supreme Court ruled this week that the state lawsuit can go forward.
Five years ago, the Adarand lawsuit impacted the wireless industry. Today, the Adarand decision continues to be battled in the courts. If Adarand hadn’t been around five years ago, would today’s PCS landscape be different?
